Today's Popular Homebuying Advice That Might Land Omaha Buyers in Hot Water
As interest rates remain high for Omaha home buyers and property values continue to increase home buyers are looking for alternative strategies to help make purchasing a needed Omaha home more affordable.
A common phrase you may hear from some real estate professionals to home buyers looking for ways to save on a home purchase is the "date the rate marry the house" strategy. This is advice that tells Omaha homebuyers that they can buy a home now and refinance it in the future with better mortgage terms.
What some well-meaning real estate agents may not realize is that it can be detrimental advice to some Omaha homebuyers. It essentially simplifies the process of securing a mortgage loan and purchasing a home assuming that the rates will go down a significant and affordable amount in a short amount of time. Real estate agents are highly knowledgeable in many areas. They can help you to secure your dream Omaha home and put in a solid purchase offer as well as negotiate the best contract terms for your personal buying needs, they can also help you to know what loan and financing options might be available, but they are experts in homes not mortgages.
If you are working with a real estate agent who assures you they can help you with your mortgage details and takes the lead on securing financing for you run in the other direction. A reputable real estate agent will never take the reigns on the financial portion of your home purchase.
Why "Date the Rate" is Not Always the Best Strategy
This strategy is best approached with caution and a serious look into your personal financial ability to pay a higher rate on a mortgage right now. Yes, you have the ability to refinance your home loan in as little as six months from the date you sign the closing paperwork. However, it is not always an easy process or one that makes the best financial sense when you consider the cost of originating a brand-new loan. There's also no magic crystal ball that helps anyone determine where mortgage rates are going to be at any point in the future.
In addition, not every homeowner is going to be able to qualify for a refinance loan on their home purchase. Just because you can apply for a new loan to attempt to get better loan terms doesn't mean that you will be approved for that refinance loan.
There is no way to forecast mortgage rates
Though market analysts do put out their predictions for where they think mortgage rates are going to go nobody can guarantee that their predictions are going to be spot on or even that they will be close. Take 2023 as an example. Several financial experts stated that they believed mortgage interest rates would be at 5% right now. They are currently hovering close to 8%. The Mortgage Bankers Association put out predictions that mortgage rates would be down to 6.1% by the end of 2023 and 5.5% by the end of 2025. Looking at those numbers right now many people would be shocked if they saw a decrease to just over 6% in the next month. It could happen but rates could also go up again or stay exactly where they are.
Mortgage rate predictions made earlier this year were not made in haste it's just that mortgage interest rates are very challenging to predict. There are several factors that impact where mortgage interest rates hover some of them include economic conditions and global events as well as inflation.
Purchasing an Omaha home with a healthy outlook on mortgage rates
If you are in need of purchasing an Omaha home or a new home because your current living situation just is not working then mortgage rates should play a smaller role in your homebuying strategy. You want to make sure that you can afford the current interest rates as they are without the expectation of being able to change them. This is always the most solid homebuying plan for anyone financially.
When buying a house several other factors should come into play beyond where mortgage interest rates are. This includes your long-term plans for staying in the home the potential growth and desirability for the neighborhood you are moving into and of course, your ability to comfortably afford the payments as they are right now. You never want to take out a loan with an interest rate that is stretching your finances thin and expectations that you will get relief soon.
Instead of searching for a home that meets your needs for a home and is within your affordable buying budget for the current mortgage rate you will be offered is always the most solid strategy.
For more information on purchasing an Omaha home with a healthy financial mindset please contact me anytime.
